'Kick in the guts': Employers cry foul over casual truck driver's win

A landmark ruling that has granted a casual worker annual leave entitlements has sparked warnings from unions and employer groups that a clearer definition of casual employment is needed.

The full Federal Court of Australia on Thursday found a truck driver employed at a Rio Tinto mine under a labour hire arrangement as a casual, was not a casual under employment law, because of his regular and continuous pattern of work.

Under the Fair Work Act national employment standards, a casual employee is not entitled to annual leave which permanent employees receive. The Act does not provide a definition of a casual employee.

Innes Willox, chief executive of AI Group.Credit:Stewart Donn

The Australian Industry Group said the decision in Workpac v Skene which found Queensland truck driver Paul Skene was entitled to be paid accrued annual leave on termination of his employment was "disappointing" and has asked the federal government to intervene to clarify the law.

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Labour hire company Workpac had employed Mr Skene to work as a casual for two and a half years at two Central Queensland coal mines.

AIG chief executive Innes Willox said the widespread industry practice was that "an employee who is engaged as a casual and paid as a casual, is a casual for the purposes of award and legislative entitlements".

"[O]ne sensible step that should be taken without delay, is for Parliament to move to protect businesses and jobs by amending the Fair Work Act to clarify that an employee engaged as a casual and paid as a casual is a casual for the purposes of the Act," Mr Willox said.

"This is the standard definition of casual employment, and the only workable definition

ACTU president, Michele O'Neil.

"The interpretation of the Fair Work Act that the Federal Court has adopted is inconsistent with industry practice and will potentially lead to a great deal of uncertainty for businesses. This in turn will not be good for jobs, including for young people who rely heavily on casual employment."

The Australian Council of Trade Unions has also called for a clearer legal definition of casual employment even as it welcomed the federal court's interpretation.

It said the case brought by the Construction, Forestry, Mining, Maritime and Energy Union opened the door for other people who’ve been employed as casuals to make claims for unpaid leave entitlements.

This is a major blow for employers who want to use casualisation to avoid their responsibility to their employees

Michele O'Neill

“This is a major blow for employers who want to use casualisation to avoid their responsibility to their employees," ACTU President Michele O’Neil said.

CFMEU national president Tony Maher said the decision challenged a flawed business model used by labour hire firms.

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"It means the end of the so-called ‘permanent casual’, which was always a rort,” he said.

“The labour hire industry will cry foul over this decision – the answer for them is to employ people under proper workplace arrangements that reflect the real nature of their work.”

Recruitment & Consulting Services Association of Australia & NZ chief executive Charles Cameron said the decision was a "kick in the guts" for business that would have "huge" liability implications.

Employees would be able to use the judgment to double dip on entitlements by claiming casual loadings but then claiming leave the loadings were supposed to replace, he said.

“This essentially creates a new ‘super employee’ category that has not existed previously, nor do webelieve it was ever the intent of the then ALP government law-makers to create.

“This will be a pivotal test case for casual employment in Australia.

University of Sydney Labor Law professor Shae McCrystal said another solution was to look at the way awards and agreements allowed employers to hire people and pay them as casuals when they were not working as casuals, but as permanent employees.

She said employers had long assumed that if they hired someone under the terms of an industrial award or enterprise agreement as a casual, they were not entitled to annual leave. But employees were entitled to annual leave under the terms of the Fair Work Act as opposed to the awards and agreements.

"This is the first time the full federal court has said that the definition of casual under the national employment standards does not depend on how someone has been classified for the purposes of their engagement under an award or agreement," she said.

A spokesman for Workplace Minister Craig Laundy said he was “reviewing the decision carefully, including any broader implications".